September 2015
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Changing Credit Card Technology: What You Should Know

A

lmost half of all credit card fraud in the world
occurs in the United States. Consumers have
recently become more aware of this problem
as a number of large retailers have reported data
breaches. Fortunately, credit card companies have
taken action.

Surprisingly, compared to other nations, the United
States is using outdated credit card technology.
The familiar swipe-and-sign system is easier to hack
than we would like to think. However, this outdated
technology will soon be replaced by a microchip
technology known as EMV (Europay, MasterCard, and
Visa) that is planned to begin in the fall of 2015.

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You may not realize it but many U.S. credit card
terminals are already capable of supporting EMV
technology. For those businesses that do not have
this technology, credit card terminals will gradually
be introduced over the upcoming years. Additionally,
banks that issue credit cards already have the ability
to issue cards with microchips and have been issuing
them for years to customers who frequently travel
overseas and must use EMV technology.

Whenever a new technology is introduced,
consumers often report feeling hesitant to embrace
the technology. If you are hesitant or if you have
questions, be sure to ask your bank or the company
through which your credit cards are issued. Also,
keep in mind that as with most technologies, the
introduction of EMV credit card technology will
be gradual and closely monitored. While new and
unfamiliar, EMV technology aims to save you from
fraud.

Whenever new technologies are introduced,
consumers often have questions. Below is a general
overview of some common questions regarding the
unique features of EMV credit card technology:
•

How are EMV cards more secure than
traditional credit cards? Traditional magnetic
debit and credit cards store unchanging data.
In other words, if someone were to copy the
magnetic strip on your card, the information
can easily be replicated and used for
fraudulent transactions. EMV cards contain a
microchip that creates a unique code for each
individual transaction. Future data breaches
will still occur but will happen much less often.

•

How do I use my EMV card? EMV cards are
“dipped” into a terminal slot. Essentially, you
will insert your card into a slot and wait for
the transaction to be processed. EMV cards
will also support contactless card reading
where you will tap your card against a terminal
scanner.

•

Will I sign for my purchases? EMV cards will
require you to either sign for your transaction
or enter a PIN number. Because many
businesses have yet to adopt EMV technology,
signatures will remain the dominant form of
verification over the next few years. Eventually,
credit card users will be assigned a pin that will
be entered for all transactions.

•

If I want to use my EMV card at a retailer
that does not yet support this technology
will I be able to? Yes! The first rollout of EMV
cards will contain both a magnetic strip and
microchip to ensure that you are able to make
all of your desired purchases.